Drawdown is how far an account or strategy falls from its highest point before it recovers to that high again.
- It is usually shown as a percentage, sometimes as an amount.
- It measures downside swings.
- How long it takes to recover also matters.
- Drawdown is not the same as loss. Drawdown is measured from peak to low; loss compares your buy price with the current or exit price.
More detail: Investopedia – Drawdown
Edited with AI from the original Tradetron article, checked against current docs (Oct 2026). Spot something wrong? Tell us in the Community.